Decree No. 92/2018/ND-CP on management and use of the Debt Repayment Reserve Fund.

 

 DECREE

On the management and use of the Debt Repayment Accumulation Fund 

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the State Budget Law dated June 25, 2015;

Pursuant to the Public Debt Management Law dated November 23, 2017;

At the proposal of the Minister of Finance;

The Government promulgates the Decree on the management and use of the Debt Repayment Accumulation Fund. 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the establishment, management, and use of the Debt Repayment Accumulation Fund.

Article 2. Debt Repayment Accumulation Fund

1. The Government establishes the Debt Repayment Accumulation Fund and assigns the Ministry of Finance to manage it according to Article 56 of the Law on Public Debt Management based on the Debt Repayment Accumulation Fund established pursuant to Decree No. 79/2010/NĐ-CP dated October 14, 2010 of the Government.

2. The Debt Repayment Accumulation Fund (hereinafter referred to as the Fund) is a financial fund outside the state budget.

3. The Minister of Finance appoints and assigns tasks to civil servants of the Ministry of Finance to be the account holder, chief accountant (or accounting supervisor), and assigns some civil servants to manage the Fund on a part-time basis.

4. The Fund opens transaction accounts in foreign currencies and Vietnamese dong at State Treasury and domestic commercial banks.

5. The Fund conducts accounting in accordance with the laws on accounting. The conversion of foreign currency into Vietnamese Dong is carried out according to the accounting exchange rate published by the Minister of Finance (or units under the Ministry of Finance authorized). The Minister of Finance issues the accounting regulations applicable to the Debt Repayment Accumulation Fund.

Article 3. Applicability

1. The Ministry of Finance.

2. The agency authorized to re-lend.

3. Borrowers of government foreign loans; objects guaranteed.

4. Relevant agencies, organizations, and individuals.

Article 4. Principles for managing and using the Debt Repayment Accumulation Fund

1. Ensuring transparency, compliance with legal provisions; ensuring safety, liquidity, and efficiency in managing and using the Fund's capital.

2. Linking the management of the Fund with public debt management, ensuring the ability to pay off government loan obligations arising from re-lending and guaranteeing risks.

3. All expenditures from the Debt Repayment Accumulation Fund shall be implemented based on the decision of the competent authority, foreign loan agreements, and contracts signed between the Ministry of Finance and the recipient of funds from the Fund, depending on the nature and characteristics of each expenditure as stipulated in this Decree.

Article 5. Ensuring the foreign currency source of the Fund

1. Based on the actual situation of foreign currency receipts and payments of the Fund, the Minister of Finance decides to adjust foreign currency for the Fund from the state budget's foreign currency fund when the foreign currency revenue does not meet the Fund's foreign currency payment needs.

2. In cases where the Fund's foreign currency revenue cannot cover foreign currency payments and the state budget's foreign currency fund does not have sufficient foreign currency to settle, the Fund purchases foreign currency from the State Bank of Vietnam or domestic commercial banks to maintain a minimum foreign currency reserve equivalent to one period of government foreign debt repayment in the fiscal year. The Minister of Finance decides on purchasing foreign currency from commercial banks.

3. The State Bank of Vietnam is responsible for ensuring the balance of foreign currency for the Fund based on the proposal of the Ministry of Finance.

Article 6. Tasks, powers, and responsibilities of relevant agencies and organizations in managing the Fund

1. Tasks, powers of the Prime Minister:

a) Decide on the use of the Debt Repayment Accumulation Fund to handle risks associated with re-lending and government guarantees according to Clause 4, Article 14 of the Law on Public Debt Management, including decisions on the recipient of advance funding, the value of advance funding, interest rates on advance funding, and the term of repayment of advance funding;

b) Decide on writing off overdue advance funding debts or restructuring advance funding debts. Decide on using the Fund's resources to handle emerging risks, including writing off principal, interest, penalty interest, and changing interest rates on advance funding when the recipient encounters difficulties due to force majeure;

c) Decide on deducting a portion of the guarantee fee, lending fee, and stipulate the management and use of funds deducted from the guarantee fee and lending management fee for public debt management operations;

2. Tasks, powers of the Minister of Finance:

a) Organize the management and implementation of income, expenditure, and use of the Debt Repayment Accumulation Fund according to Clause 3, 4, 5, Article 56 of the Law on Public Debt Management and the provisions of this Decree;

b) Report to the Government so that the Government reports to the Standing Committee of the National Assembly and the National Assembly on the situation of income, expenditure, debt obligations, reasons why the Fund does not have sufficient sources to repay debts, and propose solutions according to the law on the state budget in cases where the Fund does not have sufficient sources to repay debts after applying risk management measures according to the Law on Public Debt Management;

c) Decide on extending the recovery of advance funding in cases where the guaranteed party encounters difficulties in repaying debts according to the Government's Decree on granting and managing government guarantees and the Government's Decree on re-lending ODA and preferential foreign loans;

d) Report to the Prime Minister for consideration and decision on writing off overdue debts, restructuring overdue advance funding debts when the recipient encounters difficulties in repaying debts according to the Government's Decree on granting and managing government guarantees, the Government's Decree on re-lending ODA and preferential foreign loans of the Government;

đ) Decide on selecting domestic commercial banks to deposit fixed-term deposits and entrust the management of the Fund's capital;

e) Approve the annual income and expenditure plan of the Fund.

3. Responsibilities of relevant agencies and organizations:

a) The agency authorized to re-lend is responsible for urging and recovering re-lending debts from borrowers and promptly and fully returning them to the Fund;

b) Re-lenders are responsible for managing and using re-lent funds for their intended purposes, timely and fully repaying re-lent funds directly or through the authorized re-lending agency;

c) Recipients of advance funding are responsible for using the advance funding for its intended purpose, timely and fully repaying the due debt to the Fund according to the agreement or advance funding contract. Implement regular reporting systems fully and promptly to the Ministry of Finance as prescribed by law. Adhere to sanctions as prescribed by law and according to the advance funding agreement in case of non-compliance with related obligations.

d) The agency receiving and managing the temporarily idle capital of the Fund shall be responsible for managing and using the temporarily idle capital of the Fund to ensure safety, in accordance with the provisions of the law, fully and timely returning the principal and interest to the Fund as agreed.

Chapter II

MANAGEMENT OF INCOME AND EXPENSES OF THE DEBT REPAYMENT FUND

Article 7. Revenues and expenditures of the Debt Repayment Fund

1. Contents of revenues:

a) Recovery of loans for relending (including principal, interest, penalty interest, and other fees);

b) Provision for risks related to relending loans;

c) Management fees for relending loans (the portion enjoyed by the Ministry of Finance according to the Government Decree on relending official development assistance (ODA) loans and preferential foreign loans of the Government);

d) Guarantee fees and late payment penalties for guarantee fees (if applicable);

đ) Recovery of capital advances from the Debt Repayment Fund;

e) Income from debt restructuring operations and portfolio management;

g) Interest income from deposits, lending, entrusted capital management, and investments of the Fund;

h) Other lawful revenues.

2. Contents of expenditures of the Fund:

a) Payment of foreign debts (principal, interest), and fees (if any) for relending loans. In cases where the state budget has advanced funds for foreign debt payments, the Debt Repayment Fund shall be responsible for repaying the state budget for the amount advanced;

b) Advance of capital to repay foreign debts for relending loans and government guarantees according to the Prime Minister's decision;

c) Expenditure for risk management according to the Prime Minister's decision;

d) Expenditure for public debt management operations from the revenue of management fees for relending loans and guarantee fees, in accordance with the Prime Minister's regulations, following the principle of not overlapping with the regular budget expenditure guaranteed by the state budget;

đ) After balancing the use for expenditures specified in points a, b, c, and d of this Article 2, the Fund may use temporarily idle capital to lend to the state budget, invest idle capital, and purchase government bonds in accordance with the Public Debt Management Law and the provisions of this Decree.

Article 8. Preparation of Revenue and Expenditure Plans of the Fund

1. The Fund prepares annual revenue and expenditure plans, reports to the Minister of Finance for approval as the basis for implementation.

2. The revenue and expenditure plan of the Fund shall be implemented in accordance with Article 9 of this Decree.

Article 9. Contents of Annual Revenue and Expenditure Plan Preparation of the Fund

1. The annual revenue plan of the Fund includes:

a) Estimated recovery of relending loans (including relending management fees) based on the relending loan contract terms and annually, based on reports from the borrower and the authorized relending agency regarding the situation and disbursement, repayment, and outstanding balances of relending loans;

b) Estimated collection of guarantee fees based on government guarantee agreements, based on reports from the guaranteed entity regarding the situation and disbursement, repayment, and outstanding balances of government-guaranteed loans;

c) Estimated revenues from debt restructuring operations, portfolio management, deposit interest, lending, entrusted capital management, and investment, and other lawful revenues of the Fund as prescribed.

2. The annual expenditure plan of the Fund includes:

a) Estimated expenditure for repaying the state budget based on the government's foreign debt repayment plan for relending loans according to foreign loan agreements;

b) Estimated capital advances from the Fund for government-guaranteed loans facing difficulties in repayment, approved debt restructuring projects, and portfolio management;

c) Estimated use of Fund capital (including expenditure for public debt management operations) according to the decision of the competent authority.

3. In case changes occur during implementation that affect the Fund's revenue and expenditure plan, the Ministry of Finance shall decide on adjusting the Fund's revenue and expenditure plan accordingly, serving as the basis for implementation.

Article 10. Implementation of Revenue Collection for the Fund

1. The recovery of debts from loans for relending, management fees for relending, and government risk reserves for relending shall be carried out as follows:

a) For relending through authorized agencies: Based on the provisions in the relending authorization contracts, the relending agency shall recover the principal, interest, late payment interest, and fees (if any), and the relending risk reserve from the borrower after deducting the management fee for relending and the relending risk reserve that the relending agency is entitled to, and then remit it to the Fund in accordance with the Government's Decree on relending ODA funds and preferential foreign loans of the Government.

b) For relending entrusted to state policy banks to monitor debt recovery: The state policy bank shall recover the principal, interest, and fees (if any), and the relending risk reserve from projects on the due date as stipulated, aggregate the recovered amounts, and transfer them to the Fund monthly after deducting the relending management fee and the relending risk reserve that the state policy bank is entitled to. The latest submission date to the Fund for the previous month's recovered amounts is the 5th day of each month. At the same time, detailed reports on the recovered principal, interest, fees, and late payment interest for each project must be submitted. Specifically, the recovered amounts from December must be transferred to the Fund before December 25, and the final amount for December will be reconciled and transferred in January of the following year if there is any shortfall.

c) For direct relending contracts between the Ministry of Finance and the borrower: Based on the provisions in the relending contract, the borrower shall directly repay all amounts due (principal, interest, fees, relending management fees, relending risk reserves) to the Fund fully and on time.

d) In cases where the borrower can only repay part of the due debt obligation, the priority order for deductions shall be as follows: late payment interest, overdue interest, due interest, overdue principal, due principal.

2. Government guarantee fees: Based on the commitment letter of the guaranteed party with the guarantor agency, the guaranteed party shall directly pay the guarantee fee to the Fund. The payment of the guarantee fee to the Fund shall be carried out in accordance with the Government's Decree on issuing and managing government guarantees.

3. Recovery of capital advances from the Fund:

a) The recipient of the advance shall repay the Fund the amount advanced, including principal, interest, late payment interest, and fees (if any) in accordance with the advance agreement signed between the Ministry of Finance and the recipient.

b) Within ten days from the due date of repayment according to the advance agreement or any signed agreement, if the Fund does not receive the repayment amount from the advance recipient, the recipient shall bear late payment interest on the overdue amount. The rate of late payment interest is 150% of the interest rate specified in the advance agreement.

c) If the advance recipient can only repay part of the due debt obligation, the priority order for deductions shall be as stipulated in point d, Clause 1 of this Article.

4. Interest from deposits or interest from temporary idle fund management entrusted by the Fund shall be collected in accordance with specific provisions in deposit contracts or entrustment management contracts.

5. Other lawful revenues: To be implemented in accordance with legal regulations and approved by the competent authority.

6. The Fund shall separately account for its revenues and expenditures, and simultaneously separately account for revenues and expenditures from relending risk reserves.

Article 11. Repayment to the State Budget

1. Monthly, the Fund shall repay to the State Budget the portion of the obligation to pay foreign debt arising from loans for on-lending that have been advanced by the State Budget to foreign creditors according to the Loan Agreement (or loan agreement).

2. The Fund shall repay to the State Budget no later than the 10th day of the following month. For amounts expected to be repaid in December, repayment to the State Budget shall be made before December 30. The formal repayment amount for December will be reconciled and any shortfall transferred in January of the following year.

Article 12. Advance Payment of Debt on Behalf of Guaranteed Parties

1. In cases where guaranteed parties encounter temporary or long-term difficulties and are unable to fulfill their due debt obligations under loans or bond issuances guaranteed by the Government, advance payment of debt on behalf of these parties from the Fund shall be carried out according to the decision of the competent authority as stipulated in the Government's Decree on the issuance and management of government guarantees.

2. Guaranteed parties and their parent companies (if any) must sign a compulsory loan agreement with the Fund Management Agency as prescribed in the Government's Decree on the issuance and management of government guarantees.

3. Guaranteed parties are responsible for fully and promptly fulfilling their due debt obligations to the Fund in accordance with the conditions set forth in the loan advance contract signed with the Ministry of Finance. If the recipient of the advance payment can only repay part of the due debt obligation, the priority order for debt reduction shall be implemented as provided for in Point d Clause 1 Article 10 of this Decree.

4. During the period of compulsory borrowing from the Fund, guaranteed parties must comply with all provisions of the Government's Decree on the issuance and management of government guarantees.

5. In cases where guaranteed parties encounter difficulties and are unable to make timely payments of their due debt obligations to the Fund, based on the decision of the competent authority regarding the write-off or deferral of debt for guaranteed parties, the Fund Management Agency shall enter into a contract or agreement with the guaranteed party concerning the write-off or deferral of debt.

Article 13. Lending to the State Budget

1. The Minister of Finance decides on the use of temporarily idle funds of the Fund for lending to the State Budget. The terms and interest rates for each loan are decided by the Minister of Finance.

2. Based on the approval of the Minister of Finance for lending to the State Budget, the Fund Management Agency shall execute a loan contract with the State Budget.

3. The State Budget Management Agency is responsible for fully and promptly fulfilling its due debt obligations to the Fund in accordance with the provisions of the contract signed with the Fund Management Agency.

Article 14. Purchase of Government Bonds

1. The level of purchase of Government Bonds shall not exceed 10% of the idle funds of the Fund and must ensure the liquidity of the Fund.

2. The Minister of Finance decides on the use of temporarily idle funds to purchase or buy back Government Bonds with a term.

Article 15. Deposit of Term Deposits and Entrusted Management of Funds at Domestic Commercial Banks

1. The Fund shall deposit term deposits and entrust the management of its funds at domestic commercial banks determined by the Minister of Finance within the list of ranked banks provided by the State Bank of Vietnam (if available) or rated by international credit rating organizations.

2. The deposit of term deposits and entrusted management of the Fund's funds must ensure safety, liquidity, and efficiency.

3. The profit generated by the Fund from using temporarily idle funds and interest from debt restructuring shall be recorded separately and used to supplement the Fund's capital.

Article 16. Utilizing capital to restructure government debt portfolios

1. The Fund shall utilize capital to restructure government debt portfolios and government-guaranteed debts according to the approved restructuring plan under Point c Clause 4 Article 56 of the Public Debt Management Law.

2. The Fund shall utilize capital to restructure debts of government-guaranteed loans, rescheduled Official Development Assistance (ODA) loans, and preferential foreign loans according to the approved debt restructuring plan by the Prime Minister.

Article 17. Expenses for public debt management operations

The Fund shall allocate a portion of guarantee fees and loan management fees to cover expenses for public debt management operations as decided by the Prime Minister.

Article 18. Risk management of Fund operations

1. In cases where the Fund's funds are insufficient for payment, the temporary shortfall shall be addressed as follows:

a) Retrieving early the term deposits at commercial banks;

b) Recovering entrusted capital management funds;

c) Selling held government bonds (if any).

2. During the implementation of Fund activities, if difficulties arise in recovering advance payments, the Ministry of Finance shall develop a resolution plan according to the prescribed regulations. If it exceeds authority, the Ministry of Finance shall submit to the Prime Minister for decision or report to the competent authority for consideration and decision.

3. In cases where the Fund lacks sufficient resources for repayment after applying risk management measures as stipulated, the Ministry of Finance shall compile a report to submit to the Government for reporting to the competent authority for consideration and decision as provided for in Clause 7 Article 56 of the Public Debt Management Law.

4. The Minister of Finance shall decide on measures to address the Fund's resource shortfall as specified in Clause 1 of this Article.

Article 19. Expenses for handling risks related to rescheduled ODA loans, preferential foreign loans, and government guarantees

1. The Fund shall allocate expenses for handling risks related to rescheduled ODA loans and preferential foreign loans of the government in the following cases:

a) Repaying foreign debt during the period when rescheduled loans are suspended;

b) Repaying foreign debt for rescheduled loans that have been written off;

c) Handling debt for projects guaranteed by the government.

2. The Fund shall implement expense allocation from the Fund according to the decision of the competent authority regarding the suspension, write-off, and handling of debt.

Chapter III

REPORTING AND AUDIT OF THE FUND

Article 20. Reporting System

1. Annually, or upon request, the Ministry of Finance shall report to the Government so that the Government can report to the National Assembly, the Standing Committee of the National Assembly, and the President on the management and utilization of the Debt Repayment Accumulation Fund in the annual public debt report as stipulated in Point d Clause 1 Article 60 of the Public Debt Management Law.

2. Annually, the Fund shall prepare a report on its operational status and financial statements. The preparation and approval of the report must be completed no later than March 31 of the following year.

3. Quarterly, before the 10th day of the first month of each quarter, the Fund shall prepare a report on the previous quarter's income and expenditure, the balance of the Fund, and the cumulative total from the beginning of the year.

4. Lending institutions shall regularly report monthly, quarterly, and annually on the recovery of rescheduled loan capital, management fees for rescheduled loans, rescheduling risks, and repayment to the Fund project by project to the Ministry of Finance. The deadline for monthly reports is the 5th day of the following month, for quarterly reports it is the 15th day of the first month of the following quarter, and for annual reports it is before January 31 of the following year.

5. The Ministry of Finance shall provide guidelines for reporting templates on the status of projects requiring the Fund to repay on behalf of others; the management and utilization of the Debt Repayment Accumulation Fund.

Article 21. Verification of Data

The Fund shall be responsible for periodically verifying data annually with relevant agencies and organizations including:

1. Verifying with lending agencies and projects directly receiving loans about loan recovery amounts.

2. Verifying with government-guaranteed loan projects regarding guaranteed debt balances and guarantee fees paid and due to be paid.

3. Verifying with the state budget regarding the amount of state budget funds advanced to cover government loans, and the amount the Fund has repaid to the state budget.

4. Verifying with units that have received capital advances or loans from the Fund as stipulated in this Decree.

5. Verifying with financial credit organizations providing deposit services or entrusted asset management services to the Fund.

Article 22. Audit of the Fund

The Fund shall be subject to audit by the State Audit Agency during the audit of the state budget or specialized audit on public debt as provided for in Article 18 of the Public Debt Management Law.

Chapter IV

ARTICLE TRANSITION PROVISIONS

Article 23. Effectiveness of Implementation

1. This Decree takes effect from July 1, 2018.

2. Decision No. 01/2013/QĐ-TTg dated January 7, 2013 of the Prime Minister on the establishment, management, and use of the Debt Repayment Accumulation Fund ceases to be effective from the date this Decree takes effect.

Article 24. Transitional Provisions

1. Capital advance contracts, loan contracts, term deposit contracts, and investment trust contracts of the Fund signed before the effective date of this Decree shall be implemented according to Decision No. 01/2013/QĐ-TTg of the Prime Minister on the establishment, management, and use of the Debt Repayment Accumulation Fund.

2. Amendments and supplements to capital advance contracts, loan contracts, term deposit contracts, and investment trust contracts of the Fund as specified in Clause 1 of this Article and signed after the effective date of this Decree shall be implemented according to the provisions of this Decree.

3. For revenues and expenditures related to public debt management operations, they shall be carried out according to Decision No. 05/2016/QĐ-TTg dated March 5, 2016 of the Prime Minister until new regulations are issued.

Article 25. Implementation Provisions

The Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees under central cities, enterprises, organizations, and individuals concerned are responsible for implementing this Decree./.